Silver Price Forecast: XAG/USD rises to near $76.00 on increased safe-haven demand
- Silver edges higher on safe-haven demand amid stalled US–Iran peace talks.
- President Trump canceled a planned delegation to Pakistan for potential direct talks with Iran.
- Fed expected to act cautiously, with gradual rate cuts under incoming Chair Kevin Warsh.
Silver price (XAG/USD) gains ground for the second successive day, trading around $76.00 per troy ounce during the Asian hours on Monday. The white metal inches higher on increased safe-haven demand amid stalled US–Iran peace talks.
US President Donald Trump called off that delegation to Pakistan to potentially discuss directly with Iran. Trump on Saturday told Jared Kushner and Steve Witkoff to skip the trip to Pakistan, which is mediating talks, saying that Iran “offered a lot, but not enough.
President Trump said, "If they want to talk, they can come to us, or they can call us. You know, there is a telephone. We have nice, secure lines." Iranian President Masoud Pezeshkian stated that his nation won’t enter “imposed negotiations under threats or blockade.”
Meanwhile, traffic through the strategic waterway remains largely restricted due to Iran’s controls and the US naval blockade, heightening fears of prolonged disruptions and further supporting crude oil prices.
Higher energy prices heighten concerns over persistent inflationary pressures and a hawkish tone surrounding central banks, which could limit the upside for non-interest-bearing Silver.
The US Federal Reserve is expected to act cautiously, with gradual rate cuts anticipated under incoming Chair Kevin Warsh. The Fed is widely expected to keep interest rates unchanged at its upcoming April policy meeting. Traders will closely watch the Fed’s press conference for more clues on how policymakers are interpreting the impact of higher energy costs and whether this alters their longer-term outlook on interest rates.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
